5.8 SHARE CAPITAL

In accordance with the Articles of Association, as of 31 December, 2010, the share capital of Federal Grid Company stood at RUR 616,780,666,776, divided into 1,233,561,333,552 ordinary registered non-documentary shares with a nominal value of RUR 0.50 per share.

The number of authorized shares is 113,244,490,279 ordinary registered shares with a nominal value of RUR0.50 per share worth a total of RUR56,622,245,139.50 (nominal value). Authorized shares have the same rights as issued ordinary shares.

No preferred shares were placed.

On 4 February the Company completed placing an additional issue of ordinary shares with a price of RUR0.5 per share. A total of 22,386,794,841 shares were placed via the additional issue, representing 79.14% of available shares. The placement generated RUR11.193 billion for the Company.

The main participant in the additional share issue was the Russian Federation, which acquired shares worth RUR11.189 billion. The remaining part of placed shares, worth RUR4.147 billion, was purchased by minority shareholders.

Proceeds from the additional share issue will be used to upgrade the reliability of power sector facilities in the Sochi Region ahead of 2014 Olympic Games preparation and to implement “Economic and social development of the Russian Far East and Trans-Baikal for the period to 2013” Federal Target Program.

On 25 March, 2011, the Company registered amendments to its Articles of Association under which share capital totals RUR627,974,064,196.50 (six hundred twenty-seven billion nine hundred seventy-four million sixty-four thousand one hundred and ninety-six) and 50 kopecks.

State registration number for the issue	State registration date and issue	Placement price	Placement method	Number of issued shares	Total number of shares (following the additional share issue))	Registration date for reporting on the issue results
1-01-65018-D	10.09.2002	RUR0.5	Distribution among company founders	243 214 483 559	243 214 483 559	10.09.2002
1-01-65018-D-001D	21.03.2006	RUR0.5	Closed subscription placement to RAO UES of Russia	118 167 724 361	361 382 207 920	15.05.2007
1-01-65018-D-002D	23.08.2007	RUR0.59	Closed subscription placement to RAO UES of Russia and Federal Agency for State Property Management	114 965 254 23	476 347 462 155	18.04.2008
1-01-65097-D-097D	03.06.2008	-	Conversion upon merger	737 588 491 911	1 153 514 196 362	12.08.2008
1-01-65098-D-098D	03.06.2008	-	Conversion upon merger	34 154 626 385	1 153 514 196 362*	12.08.2008
1-01-65018-D-101D	25.12.2008	RUR0.51 for open subscription	Open subscription	80 047 137 190	1 233 561 333 552	26.01.2010
		RUR0.5 for entities with pre-emptive rights
1-01-65018-D-102D	12.08.2010	RUR0.5 for open subscription	Open subscription	22 386 794 841	1 255 948 128 393	01.03.2011
		RUR0.5 for entities with pre-emptive rights

* 94,576,384,089 shares were redeemed (annulled).

Number of the Company’s Shareholders as of 31 December, 2010

	Number of holders	Number of shares	% of the total number of shares
Number of individuals registered in the shareholder register	412 775	10 549 483 174	0,84
Number of legal entities registered in the shareholder register (including nominee holders, trust managers and the Issuer’s issuer account)	1 458	1 251 239 357 525	99,6251
nominee holders	65	246 236 484 889	19,6056
trust managers	6	5 101 036	0,0004
Issuer’s issuer account	1	5 901 991 179	0,4699
Number of separate accounts for accounting for securities in joint shared ownership	1 711	61 265 519	0,0049
Number of separate accounts for accounting for securities of undisclosed entities	1	3 922	0
Total number of entities registered in the shareholder register	415 945	1 261 850 110 141	100

List of Registered Entities That Hold More Than 2% of Accountable Shares in Their Individual Accounts as of 31 December, 2010

¹	Registered entity type	Name	Number of shares	Share of share capital, %
1	Owner	The Russian Federation, represented by the Russian Federation Agency for State Property Management	998 216 115 886	79,48
2	Nominee holder	Depository Clearing Company	79 451 549 039	6,33
3	Nominee holder	Depository and Corporate Technologies	67 916 184 242	5,41
4	Nominee holder	Non-banking Credit Organization “National Settlement Depository”	59 513 606 178	4,74
5	Nominee holder	ING BANK (EURASIA)	27 076 780 253	2,16

Information about the Registrar

 In December 2010, due to a decision by the Russian Federal Financial Markets Service to cancel the register-maintaining license of Central Moscow Depository, the Company decided to cancel its agreement with Central Moscow Depository (CMD) on keeping and storing the Register of Owners of Nominal Securities. Since February 2011 the Company’s Registrar has been STATUS Registrar Company, which was selected via an open tender.

Location:
32 Novorogozhskaya Street, bld 1, Moscow, Russia, 109544

Mailing address:
32 Novorogozhskaya Street, Bld 1, Moscow, Russia, 109544

Telephone: +7 495 974 8350

Fax: +7 495 678 7110

Email:
info@rostatus.ru/p>

License No:
10-000-1-00304

Issue date:
12.03.2004

Valid through:
Unlimited

Issuing authority:
The Federal Financial Markets Service (FFMS)

The share of foreign investors in Federal Grid Company’s share capital stood at 5.78% as of 31 December, 2010.

Most of the foreign buy-side investors continue to view the Company’s shares as promising, with the growth rates for the Company’s profit and/or share value exceeding average levels for other companies in the same industry. One-third of the investment is so-called “index investors” (29%), another 27% comes from investors who believe the Company’s shares are currently heavily undervalued. Hedge funds account for only 0.33%, after seeing a marked decline (16.87%), which is generally seen as a positive.